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Lexus eschews production in China over quality concerns

One of the more popular trends in the auto industry is setting up production operations in China. Mainstream manufacturers like Ford, General Motors and Volkswagen have done it, and even luxury marques like Audi, BMW and Mercedes-Benz have or will soon have manufacturing ops in the People's Republic.

One company that isn't building cars in China, though, is Lexus. The Toyota-owned luxury brand still manufactures all of its vehicles in Japan (aside from a few RXs, which are built at a Toyota factory in Canada). According to Tokuo Fukuichi, Lexus just isn't ready to build cars there yet.

"The German Three have a brand image that they have cultivated over the past century in their long history, but Lexus is not in people's minds like that yet," Fukuichi-san told Reuters UK.

From the sounds of it, he isn't saying that the Chinese won't build the cars properly – we're assuming that if BMW and Mercedes-Benz are comfortable with Chinese quality, Lexus would be able to manage – it's that the sort of damage Lexus could potentially suffer in the Chinese market due to any potential reliability woes relating to local production are more than it could bear.

While importing vehicles into the country raises their prices considerably, it seems like Lexus is playing its cards carefully and looking at the larger picture, rather than the short-term profits it could make by building vehicles in China before its ready. Still, Lexus only sold about a fifth of what BMW did in China last year. We imagine it can only be so careful while watching the Germans gobble up market share.

What do you think? Should Lexus take the risk and join in on local production in the PRC, or is it right to carefully cultivate its image before taking the plunge with Chinese production? Have your say in Comments.

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Every major Japanese car company now have big factory in China, plus the big three all sold over 3 quarters of a million cars in China last year. The hate factor is over-emphasized, it's just that Chinese simply don't care about Lexus that much. For Chinese European = true luxury, period.

I think the elephant in the room has to be addressed to really get to the root of all this. The Japanese and the Chinese do not particularly like each other. Lots of war atrocities in the past are still not forgotten.

So in other words, the Lexus brand name isn't prepared to take a hit if quality is lacking from Chinese built Lexus vehicles. The Germans have people so brainwashed that even if a door fell off the car a Chinese built BMW, people would still buy them.

There is a more subtle issue here, and it has nothing to do with quality of manufacturing or the perceived qualities of European brands. There still exists a cultural distrust of all things Japanese in China. Many Chinese would much rather buy American or European brands than give money to the Japanese.

I doubt this is the case... much more to do with "Senkaku/Diaoyu islands" dispute and the consequence of Chinese being led to believe that all things Japanese are evil... The Chinese will never pay German money for a car coming from Japan.

Lexus doesn't have nearly the potential that BMW/Mercy/Audi have in China. As a Japanese brand, they're subject to the anti-Japanese fervor that swells regularly in China. I would say the real story is "We have limited potential, so we can't justify opening a Lexus-only factory, but we think using a Toyota factory to build Lexuses will damage our reputation."

Or, does this have something to do with the fact Chinese consumers still remember the Rape of Nanking, and don't like the Japanese one little bit? Note that Japanese brands have had little success in China. Toyota is smart enough to recognize they'll probably never do will with their Toyota Lexus models in China. Just ain't-gonna-happen.com. So they claim quality wouldn't be up to snuff and walk away quietly.